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NCAA, leagues agree to share future revenue with college athletes
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The NCAA and all five power conferences have agreed to allow schools to share revenue directly with college athletes.
On Thursday, the Pac-12 became the final Power Five league to sign off on a settlement agreement to bring an end to the landmark House v. NCAA case and other related antitrust lawsuits. Thursday evening, counsel for the athletes in the case announced the settlement. The agreement will see the NCAA pay more than $2.7 million in back damages over 10 years to past and current student-athletes.
The settlement terms must be approved by Judge Claudia Wilken, who is presiding over House v. NCAA as well as Hubbard v. NCAA and Carter v. NCAA. According to ESPN’s Pete Thamel and Dan Murphy, that process is expected to take several months. Schools could begin sharing revenue by the fall of 2025.
In the first year of the settlement, each school will be able to share 22% of average revenues, which is projected to be around $20 million per school, per year. That will be in addition to scholarships, third-party NIL payments, healthcare, and other benefits that college athletes already receive, and schools can choose to make the new payments and benefits to athletes playing any Division I sport.
“This landmark settlement will bring college sports into the 21st century, with college athletes finally able to receive a fair share of the billions of dollars of revenue that they generate for their schools,” said co-lead counsel Steve Berman in a release. “Our clients are the bedrock of the NCAA’s multibillion-dollar business and finally can be compensated in an equitable and just manner for their extraordinary athletic talents.”
Over the 10-year period, counsel for the athletes estimates the total value of new payments and benefits to exceed $20 billion, making it one of the largest antitrust class-action settlements in history.
“This settlement is also a road map for college sports leaders and Congress to ensure this uniquely American institution can continue to provide unmatched opportunity for millions of students,” NCAA president Charlie Baker said in a joint statement with the P5 commissioners.
Notre Dame president Rev. John I. Jenkins questioned the settlement in a statement to Yahoo Sports, saying it is “undesirable” and provides only “temporary stability,” but added it was necessary to avoid what he believed would be “bankruptcy of college athletics.”
According to ESPN, the settlement prevents athletes from suing the NCAA for other potential antitrust violations. It does not resolve every legal issue facing college athletics, but it does open the chapter to a new era.
From ESPN:
Several athletic directors told ESPN that they are hopeful the settlement lays the groundwork for a system in which success on the field is less dependent on which schools can spend the most money. Sources said some of the challenges to solve include figuring out how to distribute the revenue-sharing money in a way that meets market needs while complying with Title IX laws and whether schools can regain control of the marketplace for college athletes, which has been outsourced during the past three years to booster collectives, which pay athletes via name, image and likeness endorsement deals.
Berman said the settlement includes a “mechanism” that he believes will make it easier for schools to rein in the marketplace for third-party NIL deals. He declined to provide any further details. Several athletic directors told ESPN this week that they were optimistic but uncertain about whether the settlement would give them enough legal room to regain control.
“I think we have a chance right now to really reshape the model in the most meaningful way of any of our lifetimes, and maybe the most meaningful way there has ever been,” said (Illinois AD Josh) Whitman, the new Division I Council chair.
While the NCAA has been defiant in protecting its amateurism model, it had a compelling reason not to go to trial. According to Yahoo Sports, the NCAA could have been on the hook for damages as high as $20 billion had it lost at trial. That amount would have been paid out immediately and it would have likely forced the NCAA to file for bankruptcy. A loss at trial would also strike down existing constraints on NIL and revenue sharing.
Derek Peterson does a bit of everything, not unlike Taysom Hill. He has covered Oklahoma, Nebraska, the Pac-12, and now delivers CFB-wide content.